Avoiding Risk: AI's Double-Edged Role In E-Discovery

(October 08, 2025) - David A. Shargel of Bracewell LLP discusses the potential risks of using AI tools in the discovery process and what lawyers need to understand about the technology as well as the importance of confirming the information generated by the AI tools.

Stories of lawyers submitting AI-hallucinated caselaw to courts have become ubiquitous in 2025. Most lawyers think "that will never be me" because they know not to rely on AI for legal research. But a potentially greater risk lurks in the shadows of this rapidly evolving technology: the use of AI tools in the discovery process.

Lawyers in hot water for AI misuse

Stories of lawyers from small firms to large have become pervasive this year, and judges have repeatedly imposed sanctions when lawyers include either nonexistent or misstated caselaw in their submissions.

Punishments have ranged from admonitions to monetary fines to the more creative, such as requiring counsel to provide a copy of the sanctions order to each of their clients, opposing counsel, and presiding judges in their other cases. Johnson v. Dunn, No. 2:21-CV-1701-AMM, (N.D. Ala. July 23, 2025). A California court recently went one step further, criticizing opposing counsel for failing to bring their adversary's AI-generated caselaw to the court's attention. Noland v. Land of the Free, L.P., No. B331918, (Cal. Ct. App. Sept. 12, 2025).

The promise of AI discovery tools

Using AI for legal research is only one of several pitfalls this new technology has created within the litigation process. Over the past couple of years, many service providers in the electronic discovery space have made available AI tools that carry both enormous promise and risk.

By any measure, AI brings enormous benefits for the discovery process. If you ask litigators (and their clients) what they dislike most about the litigation process many would probably put document discovery high on the list. Document discovery is time consuming and expensive, especially with the ever-expanding scope of what might be included, such as phone data, recorded videoconferences, and now even AI prompts and outputs.

Tools are now readily available allowing practitioners not only the ability to more effectively search for relevant materials, but also the ability to automatically categorize documents, such as for responsiveness or privilege.

Just like lawyers need to proceed carefully if they choose to utilize AI-generated legal research, they must also use caution when using AI discovery tools.

In the words of former Magistrate Judge Andrew Peck, when considering the use of then-emerging computer-assisted review, technology "is not a magic, Staples–Easy–Button, solution appropriate for all cases." Moore v. Publicis Groupe, 287 F.R.D. 182, 189 (S.D.N.Y. 2012). Rather, "the technology exists and should be used where appropriate, but it is not a case of machine replacing humans." Id.

Lawyers cannot have blind faith in AI discovery tools

While AI seems to have permeated all facets of our lives, with society placing ever-increasing weight on its output, practitioners using AI discovery tools cannot do so blindly. Attorney ethical rules make that clear, including the comments to ABA Model Rule 1.1, which provide that lawyers must remain abreast of "the benefits and risks associated with relevant technology."

Model Rule 5.3 also might apply, requiring lawyers who utilize outside discovery vendors — such as those that offer AI tools — to "make reasonable efforts to ensure that the services are provided in a manner that is compatible with the lawyer's professional obligations."

This means that lawyers must take steps to understand how a given AI tool is making decisions, such as whether a document is relevant or not. Most AI discovery tools will provide a rationale for a given decision output — such as by pointing to a part of a document underpinning the determination — and lawyers must take additional human steps of confirming the AI prediction is correct.

Avoiding the risk of AI incorrectly identifying documents is especially important if a lawyer utilizes AI to find documents that are privileged. If the AI tool fails to identify documents that are, in fact, privileged, relying solely on AI could result in the inadvertent disclosure of protected materials, and risks exposing client confidences to opposing counsel or the government.

Thus, if lawyers use AI to aid document review, they must take the extra step of confirming the tool's predictions. In practice, this usually involves a human second level review of any document coded by AI, as well as manual searches to confirm that any relevant materials have not been missed.

Other pitfalls

Erroneous productions are not the only risks associated with the use of AI. Lawyers must also investigate and understand how client data will be processed and used. This includes considering whether data will be processed on remote servers located abroad, potentially implicating privacy laws such as HIPAA or GDPR.

Lawyers should also ensure that client data will not be used to train AI models. Otherwise, privileged or confidential client materials could become part of a training set, later revealed in AI outputs to unrelated users.

Use of AI tools should be transparent

If practitioners wish to utilize AI tools in the discovery process, they should be upfront and transparent about the process. In civil litigation, this means discussing AI use during initial meet and confer conferences with opposing counsel and including AI parameters within the parties' ESI protocol. In government investigations, such as in the context of a response to a subpoena, this would likely involve having an agreement with the government entity regarding AI process and procedure.

Ironing out the details of AI use beforehand, including ensuring processes are in place for a human review of AI work product, ensures a process that is transparent, minimizes pitfalls, and promotes defensibility.

In sum, using AI during the discovery process can save lawyers time and money, but taking care to avoid associated pitfalls will keep you out of the legal headlines.

Originally published by  Thomson Reuters' Westlaw Today.

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